TRADE

Wednesday, December 20, 2006

TRADE

China Not Called Manipulator

Treasury Secretary Henry M. Paulson Jr. declined to brand China a currency manipulator, saying it is taking steps to make the yuan more flexible. In its semiannual foreign-exchange report, the Treasury Department tempered language in the May release, which had criticized China for being "far too slow and hesitant" and had said delay was "unjustified." This time, the department said China's effort to boost flexibility was "considerably less than is needed."

ECONOMY

Producer Prices Increase

Prices paid to U.S. producers rose 2 percent in November from the previous month, led by higher prices for energy and light trucks, the Labor Department said.

Separately, the Commerce Department said that housing starts rose at an annual rate of 1.588 million in November, more than forecast and 6.7 percent higher than in October. Building permits declined.

WALL STREET

Discover to Be Spun Off

Morgan Stanley said that next year it will spin off its Discover credit card business in a bid to pump up shareholder value. For years, shareholders have urged Morgan Stanley to dump Discover because it has been steadily losing ground in a field of larger competitors.

Morgan Stanley also said its fourth-quarter profit rose 11 percent from the corresponding period a year earlier, to $2.21 billion. Net revenue rose 24 percent, to $8.63 billion. Full-year profit rose 51 percent, to $7.47 billion. Net revenue increased 26 percent, to $33.86 billion.

MERGERS & ACQUISITIONS

Equity Firms Purchase Harrah's

Harrah's Entertainment, the world's largest casino company, accepted a $17.1 billion offer from Apollo Management and the Texas Pacific Group in one of the largest private-equity buyouts ever. The private equity firms will also assume $10.7 billion in debt. The offer is 35 percent higher than Harrah's closing price on Sept. 29, the last trading day before the initial bid was announced.

Ericsson to Buy Router Firm

Ericsson, the world's largest maker of wireless-network equipment, agreed to buy Redback Networks for $2.1 billion, accelerating competition with Cisco Systems in the market for Internet routers. Redback will retain its management team and operate as a unit of Stockholm-based Ericsson, the San Jose company said.

EXECUTIVES

Dell Director Promoted to CFO

Former American Airlines chairman Donald J. Carty was named Dell's vice chairman and finance chief effective Jan. 1. He replaces James Schneider, who will leave the company. Carty has been on Dell's board of directors since 1992 and chairs the audit committee.

Toll to Get $17.5 Million Bonus

Toll Brothers chief executive Robert Toll will receive a $17.5 million bonus for fiscal 2006, a year in which the company's profit dropped by 15 percent. Toll will also receive $3 million in restricted stock that will vest over two years.

His 2006 bonus is a drop of 36 percent from the previous year's bonus and $4 million less than what he would have received under a previous pay plan that was amended Dec. 15.

LEGAL

Spitzer Refiles H&R Block Suit

New York Attorney General Eliot L. Spitzer filed a new complaint against H&R Block over individual retirement accounts after a state judge threw out an earlier version, saying she did not have jurisdiction in the case.

Spitzer sued H&R Block in March, claiming the nation's largest tax preparer encouraged clients to put tax refunds into retirement accounts that charged more in fees than they earned.

BANKRUPTCY

$300 Cab Rides Pique Judge

Judge Burton Lifland of the U.S. Bankruptcy Court in Manhattan approved lawyers' and consultants' requests for about $22 million in fees related to Dana Corp.'s bankruptcy reorganization but, in an unusual move, declined to approve their expenses.

Lifland pointed to $300 taxi rides, $9,000 air fares, $500-a-night hotel rooms in Detroit and $700 meals for four people in denying nearly $1 million in expenses. "I have a distinct impression there is a sense of exuberance here," Lifland said.

STOCK OPTIONS

Forrester CFO Quits After Probe

Forrester Research said Warren Hadley resigned as chief financial officer after an internal investigation found irregularities regarding an option grant for 5,000 shares made to him in 1999. Forrester said the impact of the grant to Hadley is not financially material, but the review is still in the early stages.

The audit committee has hired independent counsel to conduct the investigation.

AUTOMOTIVE

Ex-Congressman to Head Group

The Alliance of Automobile Manufacturers, a trade group that represents nine U.S., German and Japanese automakers, named former Democratic congressman Dave McCurdy as its chief executive.

McCurdy, now chief of the Electronic Industries Alliance, will join the group Feb. 12, the District association said in a statement.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.